#4 - American Electric Power (NASDAQ:AEP)
Typically, utilities line American Electric Power (NYSE:AEP) are not the first stocks to come to mind in the context of falling interest rates. After all, when the dollar gets weaker, it raises the cost of energy and commodities.
But therein lies the beauty of the situation for investors in AEP. Because the company is a utility, it generally operates as a monopoly, or at worst a duopoly, in the markets it services. That means it can pass along rate increases to its consumers without disruption.
However, these are far from normal times. The intense social distancing measures being undertaken throughout the country is having a negative effect on utility usage. And that is having an effect on AEP stock. Since the middle of February, the stock has dropped 20% and is down nearly 15% in 2020.
Ultimately this decline in demand will be temporary. Slowly but surely businesses will reopen. And as they do, electricity use will begin to normalize. There is no question that there is considerable debate over when the United States will be open for business. And that makes it hard to make a prediction about the short-term outlook for the stock. The truth is the company may have a challenging 2020, but investors can capture a nice dividend for their trouble. Over the long haul, AEP looks like a well-run company that is a sound investment in any market.
Stock #6 just crossed over both its 50-and 200-day moving averages, which is a bullish sign
About American Electric Power
American Electric Power Company, Inc, an electric public utility holding company, engages in the generation, transmission, and distribution of electricity for sale to retail and wholesale customers in the United States. It operates through Vertically Integrated Utilities, Transmission and Distribution Utilities, AEP Transmission Holdco, and Generation & Marketing segments.
Read More - Current Price
- $92.54
- Consensus Rating
- Hold
- Ratings Breakdown
- 7 Buy Ratings, 4 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $88.43 (4.4% Downside)
